Ask any successful small business owner what their secret is and they’re likely to tell you they have an excellent bookkeeper and accountant. Okay fine, they probably won’t say that—at least not upfront. Their answer probably references their passion for connecting their community to amazing goods or services that they wholeheartedly believe in, as well as the adaptability, creativity, and resiliency required to make that vision come to life.
But if you ask us, one of the most important factors of a small business’ success is solid financial management infrastructure. Effective financial infrastructure—which includes bookkeeping, accounting, and short- and long-term financial strategy—helps business owners make informed, strategic decisions about their business’ direction and growth. Even the most talented, creative, and charismatic entrepreneur needs to accurately record their finances and file taxes correctly in order to build a strong business.
In this blog, we describe what financial services are and why they’re integral to the success of your business.
What are financial services?
Financial services help manage the money and assets of a business to ensure it is profitable, compliant, and resilient. This often includes:
- Maintaining accurate, organized, and up-to-date financial records to plan for any opportunities or challenges your business may face;
- Preparing monthly financial statements to ensure you know the details of all incoming and outgoing payments—and how well your business did that month;
- Using that data to glean insights into your business’ short- and long-term financial health; and
- Recommending financial strategies and targets so you can meet your business’ goals and operate with confidence.
How do financial services benefit me?
- Understand where your money is going. What are you spending every month? Are there any areas where you can cut costs without comprising the quality of your good(s) or service(s)? Are there areas you want to improve and invest in?
- Know how much money is coming in and where it’s coming from. How much money do you bring in every month? Are some months more lucrative than others? Why? What products or services make you the most money?
- Ensure your business is compliant with ever-changing rules and regulations at the local, state, and national level. Are you meeting all state and federal tax requirements? Did you apply for and receive the correct permits, licenses, and certifications for your business?
- Understand what’s working and what isn’t and use that information to make adjustments. Are there any products that need pricing adjustments? Do you have too much or too little inventory? Do your marketing strategies translate to higher (or lower) sales?
- Get a neutral, third-party review on all your materials to make sure everything is as it should be. Are there are any outgoing expenses that shouldn’t be there? Were any payments duplicated? Was a bill higher than it normally is? If so, why?
- Know how to respond to inflation and other economic trends that may impact your bottom line. How might this affect your business’ income this month? How should you adjust your prices to reflect inflation? Should you increase your employees’ wages and if so, by how much?
- Understand if you can take on new projects or initiatives. What’s the cost and benefit of these projects? Can you embark on a new project without compromising your current products or services? What’s the best timeline for rollout?
- Know whether you can apply for and receive certain loans or grants and how you can spend them. Based on your yearly income last year, does your business qualify for this loan? Are there any restrictions on how you can spend your loan or grant?
- Get personalized advice from financial experts and strategists who can advise on all levels of growth. Have additional questions you’re not sure how to answer? Want guidance that’s unique to your business?
The most important benefit of financial services is that they allow you to make informed decisions so you can accomplish your goals efficiently and effectively.
Reach out to learn how Black Gallina Consulting can help small business owners like you achieve your goals.
